CEO warns of slower sales and enquiries in biggest markets as rate rises and tax changes hit sentiment
Property developer Mirvac's latest results provide fresh evidence that Australia's housing downturn is deepening as four interest rate rises this year erode borrowing capacity and buyer confidence.
The group reported slower first-quarter home sales and a shrinking pre-sales book, recording 429 net deposits and exchanges, while its residential pre-sales balance – the value of homes sold off the plan but not yet settled – slipped to approximately $1.4 billion, down from $1.5 billion at the end of June.
Settlements, the point at which a buyer completes the purchase and pays the balance, rose to 291 lots from 265 a year earlier. That lift largely reflects apartment projects sold in stronger conditions over the past few years now reaching completion, rather than fresh demand.
“The residential operating environment in FY27 has been challenging, consistent with our outlook in August,” said chief executive and managing director Campbell Hanan. “The impact of interest rate rises and tax changes on consumer sentiment has resulted in a slow-down of residential sales and enquiries, most notably in New South Wales and Victoria and more recently in Queensland.”
He added that Mirvac “is well positioned, with a high level of pre-sales, low defaults and a ramp up in project activations”.
The rest of the business held up comparatively well, with high office occupancy rates (96%), industrial occupancy rates (97%) and retail occupancy rates (99%).
"We are making good progress across our active commercial and mixed-use development pipeline, with several major projects running ahead of program," Hanan added.
Investors have been less sanguine, with Mirvac shares falling 26% over the past 12 months.
Mirvac flagged a turn in August, when Hanan warned of “some moderation in residential markets”. Nonetheless, Mirvac expects 2,800 to 3,100 residential settlements in FY27, up from 2,130 in FY26, with most of them landing in the second half. The first quarter's 291 settlements represent roughly a tenth of the bottom of that range.
The second-half skew means a growing share of earnings rests on buyers who signed contracts in a rising market completing their purchases in a falling one. Defaults were low at just 0.3% in FY26, although conditions have become materially tougher since.
How the 2026 housing market cooled
Mirvac's slowdown sits squarely inside a broader correction. The Reserve Bank of Australia (RBA) has raised the cash rate four times in 2026 – in February, March, May and September – and on 29 September the RBA pushed the cash rate to a 15-year high of 4.6%, its highest level since November 2011. Within days, all four major banks passed the September rate rise on in full, taking Westpac's lowest variable rate from 5.99% to 6.24%.
Values have followed. Cotality's Home Value Index showed national dwelling values fell 1.1% in September 2026, the sixth monthly decline in a row, leaving them 5.2% below the March peak. Sydney values are 8.6% below their February high, and 97% of capital city suburbs recorded falls over the three months to September.
Other gauges point the same way, if more gently. PropTrack data showed home prices falling for a sixth month, with national prices 3.3% below their March peak.
Loan demand has dropped further than prices. Equifax figures showed mortgage demand slumped 19.2% year on year in September, the weakest reading since October 2022, with first-home buyer demand down more than 22%.
Policy has added pressure on investors. The 2026–27 federal Budget, handed down on 12 May, limited negative gearing to newly built residential property and replaced the 50% capital gains tax discount with indexation and a 30% minimum tax on gains, according to Commonwealth Bank analysis.
Forecasters expect more to come. AMP chief economist Shane Oliver has lifted his forecast for house price falls to 10-15% from peak to trough, while new Domain data shows that Australian house prices have seen their steepest decline on record, with up to $89,000 wiped off the median house price in some capital cities in the space of three months.
